Context:
Britain’s exit (aka BREXIT) from European Union has sparked a debate centered on globalization.
Globalization:
Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. Globalization has been going on for centuries.
What has made it unique in recent times is the speed of the movement.
1. Proponents of globalization argue that it allows poor countries and their citizens to develop economically and raise their standards of living.
2. Opponents of globalization claim that the creation of an unfettered international free market has benefited multinational corporations in the Western world at the expense of local enterprises, local cultures, and common people.
3. Resistance to globalization has therefore taken shape both at a popular and at a governmental level as people and governments try to manage the flow of capital, labor, goods, and ideas that constitute the current wave of globalization.
Did British people vote against globalization?
• No! Because Britain has benefitted greatly from Globalization through free trade. In both demographic and geographic terms, Britain is a small country. It is not the size of the domestic market that has determined its growth.
• Moreover, even after BREXIT, Britain can’t choose to become an isolated island. It will have to continue to be part of an international trade regime fueled by globalization and underlying principle of free trade.
Reasons for Brexit:
• Xenophobia: British people have voted against the EU’s migration policy which has resulted in shifting of all the low-paid jobs in the hands of migrants.
• EU’s increased attempts at greater economic integration, well beyond free trade of goods and services, resented by British non-elite and made them vote for BREXIT.
• Rise of populist parties across the world, molding the public opinion against globalization. The failure of current governments to resolve the economic hardships(low growth, unemployment etc) has created the favourable conditions for it.
• Anti-EU feelings which deepened in the wake of EU’s inability to respond effectively to the global downturn and the Eurozone crisis also contributed to BREXIT vote
Setback to Globalization:
• The backlash against globalization stems from a growing realization that the biggest winners of globalization have been international corporations, wealthy families, skilled and educated workers and those with easy access to capital.
• Older, working-class families in many Western nations have instead struggled with stagnant wages, job losses and staggering debt.
• Income inequality has grown worse in many of the same countries that have embraced globalization.
• World trade and economic growth have also slowed in recent years, creating a negative opinion against globalization.
Impact of BREXIT on globalization:
Globalization has been getting setbacks even before the happening of Brexit. Brexit is just one process in a continuum.
• BREXIT could lead to a more closed Europe, with free flow of labor and goods impacted.
• Open trade and immigration policies will bear the brunt of BREXIT. It can fuel the backlash against globalization culminating into the total breakdown of EU itself.
• There can be resistance to international migration of workers. For example in United States the H1 visa issue.
• But overall globalization is here to stay. Countries around the world are so integrated and cross border movement of goods and services has been established so well that it is difficult to break from it and grow independently.
Conclusion:
BREXIT as in itself has only brought this entire debate about pros and cons of globalization to the centre-stage. World leaders need to frame policies that offset the negative impacts of globalization when economies are in recession. Giving in to the anti-globalization sentiment will only prove to be a retrogressive step towards a world with borders.
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